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Ewen Macdonald plans to return to Manawatu when he is released from prison, saying he wants to rebuild his life and put his criminal past behind him.

Macdonald, 32, was declined a pre-Christmas release yesterday after an hour-long hearing before the Parole Board at Manawatu Prison.

Board member Justice Warwick Gendall told Macdonald he would be required to undergo "intensive psychological therapy" to address his "underlying issues" before he next faced the board in 11 months.

The board also called for a report from a forensic psychiatrist.

Macdonald was eligible for parole as he had served a third of his five-year sentence for arson, criminal damage and theft.

He has been in custody since April last year, when he was arrested for the murder of his brother-in-law, Feilding farmer Scott Guy. He was found not guilty at a jury trial in Wellington.

Board member Neville Trendle said he had heard from a member of Kylee Guy's family who said Macdonald's offending was "motivated by revenge, retaliation and jealousy".

The family didn't think Macdonald should be allowed to live in Hawke's Bay, where Mrs Guy now lives, or Manawatu.

Macdonald was asked what he thought of that.

"I guess in the future I'd like to be able to come back to the Manawatu because I have got future employment prospects here and just with my children and my family [living there]."

However, it is understood his estranged wife, Anna Guy, plans to move to Auckland with their children early next year.

During the hearing, Macdonald said while he was not one to dwell on things, he wished to repay his victims by way of reparation, or volunteer his time labouring.

Craig Hocken, the Colyton farmer who lost two trophy deer to Macdonald and Callum Boe's poaching in 2006, said he did not want Macdonald on his farm.

"Hopefully, he'll come out a better person," he said.

"I hope he gets the help he requires or needs and he faces up to what he's done.

"You can't go around blaming everybody else. He's big enough and ugly enough to make his own decisions and he's got to face up to it."

Macdonald talked the board through his offending, saying he knew he needed to change after damaging Scott and Kylee Guy's new house in January 2009 and leaving offensive graffiti painted on the outside.

He admitted that was done for revenge and because he was frustrated with the farm working situation, but he said burning down an old house on the Guys' side of the family farm was just a "stupid act".

"It wasn't getting at Scott or Kylee.

"I thought I could put it behind me," Macdonald said of his crimes.

"I never thought of the consequences; it was always just completing the mission."

While in prison, Macdonald had completed a carpentry course and he was starting a landscaping and painting course.

After the hearing, Anna Guy said she had expected parole would be declined.

"We're carrying on as normal. I'm not dwelling on Ewen and the parole and all that kind of stuff," she said.

"I still can't understand how you can get away with living like that but obviously he could. I'm still surprised at myself that I didn't pick up there was something going on."